Page 20 - March 11, 2019
P. 20
THE WEEKLY ANCHOR
THE WEEKLY ANCHOR
PAGE 20 MONDAY MARCH 11, 2019 MONDAY MARCH 4, 2019 PAGE 13
T he Weekly ANCHOR
Farm and Fieldarm and Field
F
News and Views
News and Views
Determining a
reasonable crop
land rental rate PASSPORT PHOTOS & MORE
Professional Digital Passport System photos
ready in minutes while you wait...
Agri-News- With spring approaching, many
landlords and tenants are reviewing their crop
land rental arrangements to see whether they
are fair and reasonable. Dean Dyck, farm
business management specialist with Alberta
Agriculture and Forestry (AF), looks at
determining an equitable rate.
“Often, people use what others are charging or
paying in the local area," says Dyck.
"Following this approach has pitfalls because
the rate may not be reflective of the soil
productivity on the farm, or there may be a
difference between what was rumoured and
what was actually paid.”
Ultimately, land rental agreements are pivotal
to a producer’s success, particularly as changes
in prices and yields from year-to-year affect Christine Alward with Diamond Hitch Equine Services held an entry level jumper show out at the
profit and the renter’s ability to pay. Yellowhead Agriculture arena on March 2, to help riders get ready for bigger competitions. It is a good
opportunity for them to test their skills. Christine said, “They have all been gaining through regular
In Alberta, cash rent and crop share are the lessons. It is nice to have it available out in this area, because usually we have to drive two hours one way
two predominant crop land rental arrangements. to attend something like this. We had to postpone holding the event a couple of hours as the
Cash rental is common because the lease is temperatures were so cold and we can't bring the horses out if it's too cold. Due to cold we had a smaller
simple, the rent is fixed, and the landowner turnout that usual but we all made the best out of the time we had.” photo Deanna Mitchener
does not have to make any operating or
DROP IN AND SEE!ROP IN AND SEE!
marketing decisions. The tenant has more these risks,” says Dyck. The formula: (yield x tenant, 33 per cent landlord. D
control over cropping decisions, and can benefit 25 per cent) x price x 75 per cent. Complete this Dyck says that the general rule is to calculate,
from higher profits. A useful method to estimate calculation for at least four major crops grown then negotiate. “Tenants should know their cost
5040 3rd Avenue, Edson040 3rd Avenue, Edson
a cash rent is called a “crop share equivalent” or in the area and take the average. of production and calculate the potential profit 5
the rental rate that would be received from a Another simple method is a percentage of before establishing a fair price. While money
7
typical 75:25 crop share lease. Computing the gross returns. Compare cash rents in your area plays a role, other factors will come into the
rate using this method requires estimates of over the past five-to-ten years against gross negotiations such as land quality, location, 780-723-578780-723-5787
long-term average yields in the area and returns of the crops that were grown. In many compatibility, communications, and honesty.”
realistic prices for the coming year. areas, cash rent is approximately 20 to 24 per “Once a price and terms have been agreed, the
T
“A suggestion is to use Crop Insurance yields cent of gross returns. most important thing you can do is put the The Weekly Anchorhe Weekly Anchor
and insurable prices. Then apply a discount of Crop share rentals are becoming less common agreement in writing,” says Dyck. “This single
25 per cent for variability in weather, yields, because many landowners do not want to take act would eliminate the majority of
and prices since the tenant is assuming all of
the risk of price or yield. These leases are disagreements that occur.”
typically 75 per cent More information on establishing, negotiating,
tenant, 25 per cent and writing a land lease is available for
landlord. If fertilizer purchase via AF’s comprehensive guide,
and chemicals are Leasing Cropland in Alberta, or by calling the
shared, then the lease Ag-Info Centre at 310-FARM (3276).
shifts to 66 per cent
Morgan Hellekson was busy cleaning her horse's hooves during the Jumper
Show that was held on March 2, at the Yellowhead Agriculture arena. Morgan
says, “ My horse's name is Hudson and is around 13 years old. It is important
to keep their hooves clean and ensure nothing is stuck in them. In the winter
they can get ice balls clumped in there causing imbalance.” photo Deanna
Mitchener
THE WEEKLY ANCHOR
PAGE 20 MONDAY MARCH 11, 2019 MONDAY MARCH 4, 2019 PAGE 13
T he Weekly ANCHOR
Farm and Fieldarm and Field
F
News and Views
News and Views
Determining a
reasonable crop
land rental rate PASSPORT PHOTOS & MORE
Professional Digital Passport System photos
ready in minutes while you wait...
Agri-News- With spring approaching, many
landlords and tenants are reviewing their crop
land rental arrangements to see whether they
are fair and reasonable. Dean Dyck, farm
business management specialist with Alberta
Agriculture and Forestry (AF), looks at
determining an equitable rate.
“Often, people use what others are charging or
paying in the local area," says Dyck.
"Following this approach has pitfalls because
the rate may not be reflective of the soil
productivity on the farm, or there may be a
difference between what was rumoured and
what was actually paid.”
Ultimately, land rental agreements are pivotal
to a producer’s success, particularly as changes
in prices and yields from year-to-year affect Christine Alward with Diamond Hitch Equine Services held an entry level jumper show out at the
profit and the renter’s ability to pay. Yellowhead Agriculture arena on March 2, to help riders get ready for bigger competitions. It is a good
opportunity for them to test their skills. Christine said, “They have all been gaining through regular
In Alberta, cash rent and crop share are the lessons. It is nice to have it available out in this area, because usually we have to drive two hours one way
two predominant crop land rental arrangements. to attend something like this. We had to postpone holding the event a couple of hours as the
Cash rental is common because the lease is temperatures were so cold and we can't bring the horses out if it's too cold. Due to cold we had a smaller
simple, the rent is fixed, and the landowner turnout that usual but we all made the best out of the time we had.” photo Deanna Mitchener
does not have to make any operating or
DROP IN AND SEE!ROP IN AND SEE!
marketing decisions. The tenant has more these risks,” says Dyck. The formula: (yield x tenant, 33 per cent landlord. D
control over cropping decisions, and can benefit 25 per cent) x price x 75 per cent. Complete this Dyck says that the general rule is to calculate,
from higher profits. A useful method to estimate calculation for at least four major crops grown then negotiate. “Tenants should know their cost
5040 3rd Avenue, Edson040 3rd Avenue, Edson
a cash rent is called a “crop share equivalent” or in the area and take the average. of production and calculate the potential profit 5
the rental rate that would be received from a Another simple method is a percentage of before establishing a fair price. While money
7
typical 75:25 crop share lease. Computing the gross returns. Compare cash rents in your area plays a role, other factors will come into the
rate using this method requires estimates of over the past five-to-ten years against gross negotiations such as land quality, location, 780-723-578780-723-5787
long-term average yields in the area and returns of the crops that were grown. In many compatibility, communications, and honesty.”
realistic prices for the coming year. areas, cash rent is approximately 20 to 24 per “Once a price and terms have been agreed, the
T
“A suggestion is to use Crop Insurance yields cent of gross returns. most important thing you can do is put the The Weekly Anchorhe Weekly Anchor
and insurable prices. Then apply a discount of Crop share rentals are becoming less common agreement in writing,” says Dyck. “This single
25 per cent for variability in weather, yields, because many landowners do not want to take act would eliminate the majority of
and prices since the tenant is assuming all of
the risk of price or yield. These leases are disagreements that occur.”
typically 75 per cent More information on establishing, negotiating,
tenant, 25 per cent and writing a land lease is available for
landlord. If fertilizer purchase via AF’s comprehensive guide,
and chemicals are Leasing Cropland in Alberta, or by calling the
shared, then the lease Ag-Info Centre at 310-FARM (3276).
shifts to 66 per cent
Morgan Hellekson was busy cleaning her horse's hooves during the Jumper
Show that was held on March 2, at the Yellowhead Agriculture arena. Morgan
says, “ My horse's name is Hudson and is around 13 years old. It is important
to keep their hooves clean and ensure nothing is stuck in them. In the winter
they can get ice balls clumped in there causing imbalance.” photo Deanna
Mitchener
